Seattle Looks to Form Local Improvement District to Raise $200MM For Waterfront Redevelopment Project

The waterfront along Elliott Bay is set for large-scale changes in the coming months ahead as Waterfront Seattle’s redevelopment project—which spans from Pioneer Square to Belltown—looks to capitalize on the opportunity created by the imminent removal of the Alaskan Way Viaduct in 2019 and the replacement of the Elliott Bay SeaWall.

And late last week on Friday, April 6th, Waterfront Seattle released the Local Improvement District (LID), which is a key component of the funding plan for the revitalization of the waterfront along with city and state funding and private philanthropy. Later this spring, the Seattle City Council will consider a “resolution of intent” about whether to form the LID, which will give property owners along the waterfront the chance to give their direct input on the proposal.

A LID is a funding tool governed by state law by which property owners pay to help fund the costs of public improvements—in this case, Waterfront Seattle’s revitalization project—that directly benefit their property, according to Waterfront Seattle’s web site. For the waterfront LID, property owners would contribute to a portion of the improvement costs, because they receive a “special benefit”—the amount individual property owners will contribute to the funding is based on the anticipated increase in their property value as a result of the park and streetscape improvements that Waterfront Seattle’s project will provide.

According to Joshua Curtis, partnership manager at the Office of the Waterfront, a number of variables go into determining special benefit for each property. “There are a number of factors that inform the determination of special benefit including zoning, use, and property condition; but one of the primary factors is its proximity to the Waterfront Seattle improvements,” he said. “Generally, the closer a property is to these improvements, the greater the special benefit it would realize.”

According to Curtis, the recently-announced LID has been several years in the works and marks the latest chapter for Waterfront Seattle’s program. “The LID has been a key component of the Waterfront Seattle Program funding plan, along with City and State funding and private philanthropy, since Seattle City Council approved the Waterfront Strategic Plan in 2012,” he said.

The waterfront Seattle rebuild project includes 20 acres of new and improved public space, improved pedestrian and vehicular connections between Elliott Bay and surrounding neighborhoods; renovated utility infrastructure and new surface streets along Alaskan Way and Elliott Way. The program, which has a potential completion date of first quarter 2023, also includes the rebuild of the Marion Street Bridge; the construction of Overlook Walk, a public pathway connecting the waterfront to Pike Place market; an expansion of the Seattle Aquarium; the Pike/Pine Renaissance Project, which is a revamping of the prominent Pike/Pine corridor in downtown Seattle; the restoration and reinstallation of the historic Washington Street Boat Landing (WSBL) Pergola; and the Seawall Project, a replacement and renovation of the aging seawall along the waterfront.

Ultimately intended to be a community asset, funding for the $688 million waterfront revitalization project will be a collaborative effort between public and private agencies. At this point in time, Waterfront Seattle estimates that the city and state are responsible for $388 million, public philanthropy for $100 million and LID (constituted by payment from property owners) accounting for the remaining $200 million, according to Curtis. “Generally speaking, the public funding sources would cover basic infrastructure and the rebuild of the surface streets, while the LID and philanthropy would fund the parks, open spaces and pedestrian enhancements,” he said, adding that, from the beginning, the undertaking represented a necessary coming together of the public and private sectors. “Since the inception of the Waterfront Seattle program, funding from the public sector needed to be supplemented with private funding if we were going to realize the Waterfront Seattle vision.”

As of last Friday, property owners can view their properties’ special benefits and preliminary assessments via Waterfront Seattle’s LID property search tool, which will give them an initial idea of what amount of funding the city will collect from them for the waterfront project. Waterfront Seattle anticipates that City Council will consider a “resolution of intent” to form the LID in spring 2018, at which point property owners will be officially notified through a letter of their preliminary assessment amounts.

Bob Macaulay of Valbridge Property Advisors, an independent real estate appraiser, is currently finishing a study of what special benefit each property will receive as a result of the park and streetscape improvements—and subsequently what amount of funding each owner might pay. According to Waterfront Seattle’s web site, approximately $414,350,000 worth of special benefits were identified in the LID study area, which ranges from Wall St. downtown to the stadiums south of Pioneer Square.

In fourth quarter 2018, City Council will officially decide whether or not to enact the proposed changes. The initiative will not proceed if property owners representing 60 percent of the assessed value submit a written protest to the city within 30 days of City Council approving the LID, according to Waterfront Seattle’s web site.

According to Curtis, the LID is one of several funding sources needed to fully realize the entire Waterfront Seattle vision. Several individual projects—including the Pier 62 rebuild currently under construction, the demolition of the Viaduct and the replacement of the Alaskan Way surface street—are not funded by the LID, which primarily funds open space, park and pedestrian enhancements.

In the meantime, the Pier 62 rebuild project is well under way, according to Jessica Murphy, project manager with Waterfront Seattle. “The Pier 62 rebuild project started at the end of last year, and we’re just getting ready to break ground on the next preparatory project, with some utility relocation work along Alaskan Way starting during the first two weeks of April, and that will continue through mid-summer,” she said.

Waterfront Seattle is currently working with one eye on the Alaskan Way Viaduct demolition, which is expected to begin in early 2019 and take approximately nine months to complete.
“There’s the parking lot area next to the pier on the waterfront, and the road is largely under the viaduct,” Murphy said. “We’re working mostly in that parking lot so that when the state comes in and moves the road out from underneath the Viaduct, we aren’t out there messing with the traffic during the demolition of the Viaduct. We want to have fewer impacts to mobility once the Viaduct starts coming down.”

As the Pier 62 rebuild and other projects along Alaskan Way continue to take shape, planning and coordination remains a key challenge moving forward, according to Murphy. “One of the challenges that we are facing is the logistically planning between all of these projects that have various moving parts and multiple agencies coming together to find the right order in which to do things,” she said. “It’s a hot market here, so we’re trying to make sure that we have everything well-defined to get the most competitive bids as possible for these projects.”